Money Transfers for Disaster Relief: Opportunities, Risks, and Potentials

Every year, millions of people who live and work abroad send money to their home countries. These transfers are called remittances and play a significant role in times of crisis. Of the total global volume of more than nine trillion US dollars transferred between 2010 and 2024, 500 billion were sent to regions hit by floods, earthquakes, or droughts. In comparison, official development assistance (ODA), released by the OECD for disaster relief, totaled 293 billion in the same period. 

Nevertheless, remittances are little considered in climate and disaster policy, write CSH researchers Andrea Vismara and Rafael Prieto-Curiel in their contribution to the 2026 WorldRiskReport, which was published today. As part of their research at the Complexity Science Hub, the pair studies the consequences of climate change on international migration patterns.

Drawing from new research and case studies, Vismara and Prieto-Curiel discuss the benefits and weaknesses of remittances in disaster response and adaptation, with a special focus on storms. “Understanding this is crucial to realistically assess a community’s resilience to disasters,” says Vismara.

“Remittances are a fast, flexible, and direct means of disaster response. They not only help communities to better cope with disasters, but also make them less vulnerable by contributing to preparedness and adaptation,” says Vismara. Households that regularly receive remittances tend to invest more in durable housing materials and insurance. In flood- and cyclone-prone areas of South Asia and the Pacific, this money also funds critical adaptation measures: better drainage, raised foundations, and storm-resistant construction.

After major storms, remittances to affected countries surge in the following months, helping households avoid selling assets or livestock to cover disaster-related income loss. When hurricanes Eta and Iota hit Central America's Caribbean coast in 2020, 8.6 million people in Nicaragua, Honduras, and Guatemala were affected. In the six months that followed, Guatemala received $2 billion and Honduras $1.5 billion in remittances, while Nicaragua received "only" $540 million. While Guatemala and Honduras have large US diasporas, the Nicaraguan diaspora is concentrated in lower-income Costa Rica. This shows how much a diaspora's capacity to help depends on who its members are and where they live.

Another factor that determines how much remittances can help is the quality of the money transfer channels. Where fees are high, the global average is 6.5% per transfer, a substantial amount of the money gets lost for the recipient. Moreover, access to transfer services such as MoneyGram is best in urban areas and not everyone can easily reach them.

“Remittances are not a silver bullet,” adds Vismara. “They tend to be unevenly distributed and therefore increase inequality, they depend on continued diaspora support and reliable transfer channels, and cannot be used for targeted support. Hence, countries cannot solely rely on them.” Another problem of the remittance economy is that it creates incentives to emigrate. Fiji is estimated to receive nearly 25% of its gross national income in remittances. Today, almost 20% of Fijians live abroad, risking a loss of labor and skilled workers for the country.

Overall, the authors argue that remittances are a vital pillar of disaster resilience and suggest policy measures to strengthen this role, “such as programs to reduce the cost of sending remittances, or temporarily waiving them, in the days leading up to a storm,” says Vismara. The UN Sustainable Development Goals (SDG) target average transaction costs of 3% by 2030. Other measures could include expanding access to financial services in rural, disaster-prone areas and tax relief measures or subsidies for stormproof renovations.

You can find the full text here (pages 34-39).

The contribution "How remittances from the diaspora help families weather the storm" by Andrea Vismara and Rafael Prieto-Curiel was published as part of the WorldRiskReport 2026 (pages 34-39).

The WorldRiskReport is an annual report on global disaster risks and is published by German network “Bündnis Entwicklung Hilft”. Each edition focuses on a main topic and includes the WorldRiskIndex, which indicates the risk from extreme natural events and climate impacts for 193 countries. The 2026 edition focuses on storms.

The Complexity Science Hub (CSH) is Europe's research center for the study of complex systems. Drawing on large-scale data across economics, medicine, ecology, and the social sciences, CSH develops quantitative methods to understand the interconnected networks that underlie society – from financial markets and supply chains to public health and urban development. The goal is to provide a rigorous basis for navigating the challenges of an increasingly complex world.

Members of the Complexity Science Hub are: AIT Austrian Institute of Technology, BOKU University, Central European University (CEU), IT:U Interdisciplinary Transformation University Austria, Medical University Vienna, TU Wien, TU Graz, University for Continuing Education Krems, Vetmeduni, WU Vienna and WKO.